May 30, 2012

Tax Reform Has Nothing To Do with Kentucky's Spending Problem

We tweeted this earlier, but here is a great editorial from Kentucky Chamber President Dave Adkisson.

Much of the early rhetoric surrounding the tax commission's deliberations speaks of "tax reform"-- a phrase that is heard by many to mean "tax increase." But as a practical matter, any benefits resulting from tax reform are likely to dissipate quickly unless close and serious attention is paid to state spending.

The chamber's 2009 Leaky Bucket report and follow-up report in 2011 noted that unsustainable spending in several areas continues to pull money away from investments in education and economic development. Although progress has been made in slowing the spending increases, the growth rate in Medicaid, corrections and public employee health insurance spending continued to outpace that of the overall state budget through fiscal 2012.

Here is the bottom line: Unless this spending is brought under control, it really doesn't matter how much tax revenue is raised.

My favorite part of the evening was Thomas' victory speech. I usually don't enjoy these, as the candidates are exhausted from the stress and insane hours of a long and hard fought campaign, and even those who are natural public speakers gush a bit and then fall back on the same trite and shop worn talking points that could as easily have been uttered by their primary opponents. Not this time. Thomas referred to the TEA Party several times. Even more amazing was the way he specifically called attention to the liberty movement as an entity distinct from the TEA Party on each of these occasions. Knowing this distinction was too subtle for the clueless mainstream media by four orders of magnitude, he called their attention to it and almost dared them not to cover it.

It is a real distinction between the Tea Party and the Liberty Movement. Mr. Massie actually identified three parts of his coalition in his speech. As noted in the "mainstream media":

During an interview with Kentucky Education Television, Massie characterized his win as one over the political establishment which "started trying to push me out of this race" and "the playing field kind of got leveled" by the Liberty for All SuperPAC.

He said the win was not just a Tea Party win but a victory for a coalition of three groups his campaign brought together.

"What happened tonight is that we built a coalition of three separate groups. I would call them the Tea Party group, the Liberty Movement and then your grassroots Ronald Reagan Republicans," Massie said.

When the Tea Party is discussed, sometimes the term refers to this coalition, and other times it refers to only those who organize themselves as a 'Tea Party'.

For electoral politics, it is the broader coalition that elects candidates.

For what it's worth, here's what the national Club for Growth PAC had to say about Mr. Massie's victory:

"The Club for Growth PAC congratulates free-market champion Tom Massie on his impressive victory," said Club for Growth President Chris Chocola. "Tom Massie will fight to cut spending, limit government, and restore the constitution. The Club for Growth PAC was proud to play a role in Tom's victory tonight and we look forward to seeing him in Congress next year."

May 22, 2012

Primary Day in Kentucky 2012

Today, there are 38 primaries for 36 seats in the Kentucky House and Senate.

In the Senate, four Republican incumbents are being challenged, and there are two Republican primaries for open seats. One Senate Democrat is being challenged in a primary, and there is one Democratic primary involving an open seat.

In the House, there are seventeen Republican primaries and thirteen Democrat primaries. Eighteen primaries are against incumbents (10D, 8R), seven are for open seats (2D, 5R), and five are for the opportunity to challenge an incumbent from the opposite party (1D, 4R). Here's a look at two dozen that we find interesting.

May 15, 2012

Broken Their Pledge Not to Raise Your Taxes

I, ____________, pledge to the taxpayers of the _____ District of the State of _________ and to all the people of this state, that I will oppose and vote against any and all efforts to increase taxes.

Kentucky only has 4 Senators and 22 House Members who have signed the pledge. Of those, 10 have violated it by voting for 2009's HB 144! It's one thing to raise taxes. It's another thing entirely to raise taxes after pledging to you constituents that you never would!

One candidate, Morgan McGarvey, received the endorsement of the Courier-Journal, labor unions and several prominent Democrats.

Morgan McGarvey received the endorsement of The Courier-Journal today, which is not yet hidden by their pay wall. The C-J said that Cunningham and McGarvey were the top two candidates, but what put McGarvey over the top was his "unequivocal support for the Ohio River Bridges Project."

The C-J joins the long list of big name endorsers for McGarvey, including a plethora of labor unions, Crit Luallen, Adam Edelen, Jack Conway and Tim Shaughnessy -- all of which are touted in McGarvey's new TV ad, hitting airwaves in Louisville now.

Apparently, what precipitated the C-J's endorsement was that McGarvey wasn't so liberal that he opposed all growth whatsoever. Which seperates him from his opponent Sarah Lynn Cunningham.

Cunningham is uncertain about the need for new bridges in Louisville, and concerned about what horrors might ensue from better roads.

The C-J said that Cunningham and McGarvey were the top two candidates, but what put McGarvey over the top was his "unequivocal support for the Ohio River Bridges Project." and Cunningham's "reservations about the second bridge because of her doubts about funding, potential sprawl and lack of plans for expanded public transit."

Yes, Cunningham is a full-fledged member of the anti-growth loony left, and has the endorsements to prove it.

Cunningham also has two new endorsers on her website: Metro Councilwoman Tina Ward-Pugh and one of the most respected liberal legislators in Frankfort, Rep. Jim Wayne.

Sarah Lynn Cunningham announced this weekend that she received the endorsement of Kentuckians for the Commonwealth's New Power PAC, the liberal activist group that has strong representation throughout the district. Cunningham was already endorsed by the Sierra Club.

There you have it.

If the left had any sort of Tea Party equivalent, Cunningham might have a chance, but it seems that McGarvey has it locked up.

McGarvey has a huge money advantage in this race (if our calculations are correct, double the rest of the field combined) and will most likely be the only candidate with any significant TV presence.

May 14, 2012

Rep. Rita Smart Begs to Raise Taxes

Most of us know that Frankfort has a spending problem, but Rep. Rita Smart (D-81) doesn't. Rep. Smart is so disappointed that Kentuckians aren't taxed enough to fund the spending she so desperately wants. From a Richmond Register article:

Smart said while it’s important to be efficient and not waste taxpayers’ money, the blame for the budget cuts rests solely on the shoulders of the state’s “antiquated” tax system.

“There’s just not enough income from tax revenue to support the things we need in our city and state,” Smart said. Legislators struggled to create a budget that would keep the state running despite the state’s Budget Office prediction of a $742 million gap between revenue and spending over the next two years.

Smart realizes that budget cuts in the judicial branch will hurt a lot of people who are already struggling in the slow economy. “Sometimes when (legislators) do things, we don’t realize the consequences,” she said.

Smart strongly advocates revamping the state tax system so the government, one of the biggest employers in Madison County, can prevent service cutbacks and furloughs. Legislators and experts in Frankfort have been examining the problem for several years, and Smart hopes that action will be taken soon.

“We just have an inadequate revenue stream,” Smart said.

She is clearly continuing the liberal tax-and-spend tradition of her predecessor Harry Moberly In the general election, Smart will face Republican Mary McGill Long, who doesn't seem serious enough to have a website or facebook page.

The Kentucky Club for Growth will continue to be an advocate for taxpayers in Frankfort.

Another member, Rep. Bill Farmer, R-Lexington, said the chances of the General Assembly passing major reform that raises new revenue "are about a step shy of impossible. If they are looking to raise significant sums of money, that's going to come up against a serious roadblock in the (Republican-controlled) Senate, and it may come up against a serious roadblock in the (Democratic-controlled) House."

But tax-and-spend Governor Lt. Jerry Abramson dreams otherwise:

Abramson said, "We'll see. ... We'll take the final recommendations, analyze the do-ables, and try to package them in a way that would create a more fair, a more competitive, a more simple, a more elastic and a more adequate revenue stream and then present that to the legislature."

May 10, 2012

A Note on Sen. Damon Thayer's Record

Thayer, 44, responds by calling Hostetler "a little desperate." Thayer touts his conservative support from U.S. Sen. Rand Paul, R-Ky., the National Rifle Association, the pro-business Kentucky Club for Growth (which ranks him best among 38 state senators) and the anti-abortion Kentucky Right to Life.

Every year, the Kentucky Club for Growth compiles a scorecard ranking our legislature according to how they have voted to address Kentucky's challenges and protect Kentucky's taxpayers. In the history of our scorecard, no Senator has opposed unnecessary spending and held the line against tax increases more often than Damon Thayer....His record isn't perfect, but his commitment to government transparency, low taxes and controlled spending is unmatched in the Senate.

Thayer's record holds today. He is not only one of the few Senators dedicated to truly standing up for taxpayers, he is the most likely to break with his leadership to do so.

In the 2009-2010 cycle, he was the only Senator to score over the threshold of 70%, with a 73% combined for the cycle (168 out of 231 possible points).

NOTE: It is always difficult to fully evaluate the Senate. We can only score recorded votes. While the House often takes votes on new spending and taxes, often the Senate defeats these efforts without a vote to score.

It is important to consider the context when reading the Senate scorecard. In 2010, the Senate stopped tax increases, advocated reducing spending and limiting debt, and all scores except one range from 68-48. In 2009, the Senate helped the House push through five new taxes and tax increases. In 2009 a few individuals voted against the tax increases leading to a greater variance of scores.

Sen. Thayer was one of a dozen Senators to stand against the Williams/Beshear tax hikes in 2009, and earned a high score for it.

His scorecard results are a success. Characterizing them any other way is a distortion of a fine record.

"Thayer, 44, responds by calling Hostetler "a little desperate." Thayer touts his conservative support from U.S. Sen. Rand Paul, R-Ky., the National Rifle Association, the pro-business Kentucky Club for Growth (which ranks him best among 38 state senators) and the anti-abortion Kentucky Right to Life."

"Clearly their eyes were glazing over when the folks at the mic asked questions," Linzy said. "The panel did say these were not the questions they were looking for. What they were looking for was info and ideas on how to implement the health care exchange."

A single, simple demand is necessary. Conservatives and tea partiers should call Governor Beshear and demand that he return the $60 million in federal grant money Kentucky has received to implement an ObamaCare. His number is (502)564-2611. Further, please call your state Senator and Representative and demand that they publicly call on Beshear to send the money back and discontinue all efforts to create an ObamaCare health insurance exchange in Kentucky.

Today, Adams reports that Beshear learned that he doesn't want to discuss Obamacare in public anymore.

Governor Steve Beshear yesterday called a halt to what was to be a series of open-to-the-public meetings on ObamaCare implementation in Kentucky.

A History of Tax Reform Reports and Efforts in Kentucky

As a part of presentations to the Governor's Tax Reform Commission, Greg Harkenrider of the State Budget Office inventoried previous tax reform reports and efforts in Kentucky. You can view a PowerPoint of the presentation here.

Aside from his assumption that a more progressive tax is inherently a more 'fair' tax, it's a good study.

William Fox of the University of Tennessee warned a decade ago that Kentucky's tax structure lacked flexibility to capture revenue from a changing economy, and predicted the state's current economic woes. The "Fox Report" as it is still called, recommended broadening the sales tax base to expanding services such as auto repair or tax preparation.

Beshear's news release on Wednesday announcing the hiring of Fox did not mention Fox's previous work for the state.

The commission also has hired William Hoyt, director of the Martin School of Public Policy and Administration at the University of Kentucky, and Michael Childress of the Center for Business and Economic Research at UK's Gatton College of Business and Economics.

Dr. Fox's work is an often-referenced analysis of Kentucky's tax code. Although several of the recommendations from the report were enacted by Governor Fletcher's tax reform effort, many of the report's philosophical themes are frequently quoted without action. His objective 2002 analysis will surely be updated for the Commission.

Childress is the former executive director of the Kentucky Long-Term Policy Research Center, and a strong and objective analyst.

Hoyt's economic expertise seems to lean towards local taxation issues, but has published several papers on Kentucky's tax code, including this 2000 study that argues that Kentucky's tax code is significantly more progressive than our neighboring states or southern states on average. His analysis seems to be that of an objective economist as well.

We had previously predicted that the Governor's Tax Reform Commission would be a venue to propose tax hikes, and still worry about that result. We also expected that the hiring of consultants would reveal a progressive bias to the efforts. This, so far, is not the case.

I still haven't read the entire 187 page audit describing some of the countless wrongdoings of Richie Farmer as Kentucky's Commissioner of Agriculture, but I've read a significant portion of it - all that I could stomach - and I must say that the impact is actually much worse than the brief highlights presented in various news articles. When all of these abuses of power are read in consecutive order, there is a cumulative effect. The details paint a picture that makes it clear that there were not a few isolated lapses in judgment. There was a persistent pattern of entitlement and malfeasance. Farmer seemed to believe that he was special and was above the law, and the world should bend to provide anything he wants just because he's so awesome.

It stinks whenever a public official puts themselves ahead of the taxpayer. It is disappointing that the media in Kentucky never seems interested in holding Democrats accountable for similar actions. Anyone with any commonsense would be able to advise Mr. Farmer that his actions are wrong, wrong and wrong.

Which is the most putrid part -- he clearly does not care that he is wrong. He clearly does not care that he embarrasses an entire slate of candidates, an entire political party.

He does not care that he is creating challenges for the new commissioner before he is even sworn in.

Richie Farmer clearly does not know right from wrong.

Mr. Farmer's lawyer sounds hopelessly optimistic when he says that the audit is politically motivated and that he would be "shocked, I would really be shocked" if a law enforcement agency were to find criminal charges included with the myriad ethics and personnel violations.

Picking on someone so completely devoid of moral fiber is easy, and we won't belabor it. We can only hope that this thorough investigation is the first of many government agencies.

A Clarification of the Boone County Parks Tax Hike

In our earlier discussion about the Boone County Parks Tax effort, we noted that "Cherry-picking...certain taxing districts to claim an offset is too politically-convenient of an argument." We have been asked to clarify that, in order to make the creation of the new Parks Tax revenue neutral, Judge Gary Moore asked the three boards he controlled to lower their rates. Other taxing districts, like the school boards, were not appointed by Judge Moore.

It is still important to note that the Library Board should have lowered their rate regardless.

We are still troubled that the reduced Library Board rate was viewed as an opportunity to create a new tax.

There is nothing positive about an effort to reduce taxes only to create an opportunity to create a new tax. In fact, the way Kentucky's 4% property tax increase limit is applied in Kentucky means that additional taxes are additional opportunities to skirt that ceiling.

May 1, 2012

UPDATE May 1 - Unchallenged Senate Incumbents

UPDATE 5/1 - After the final filing deadline, the Supreme Court redistricting decision and resulting withdrawals, there are five incumbents without challengers.

UPDATE 2/1 - Seven incumbents remain without opponents

UPDATE 2:30 - David Prince has filed to primary Sen. Ray Jones

ORIGINAL POST - Pending court action, the filing deadline for the state legislature is today at 4PM. Thirty-five citizens have filed for the 19 Senate seats up for election this year, yet nine Seantors remain unopposed. Here's the list:

UPDATE 11:29 - Lyen Crews files for a rematch against Rep. Carl Rollins in the 56th. One down, 45 to go.

ORIGINAL POST - Pending court action, the filing deadline for the state legislature is today at 4PM. As of Monday night, 170 individuals have filed for the 100 seats in the House of Representatives and 32 had filed for the 14 Senate seats up for election this year.

Somehow, despite strong statewide dissatisfaction with the way Frankfort operates, there are still several incumbents unopposed. Here's the list as of last night.

Forty-five Legislators Unchallenged for Reeelection

Out of 119 legislative seats up for election this year, only 36 will be on primary election ballots - 28 House seats and eight Senate seats. In all, 40 state representatives and five senators are running unopposed.

That's not unusual in Kentucky. In some election years, the number of incumbent lawmakers without challengers is even higher. The reasons are varied, including the necessity for lawmakers living in distant parts of the state having to be away from home for about three months a year while the Legislature is in session.

"It is a daunting task to run for a legislative seat - raising six-figure sums to challenge an incumbent candidate or even to run for an open seat," said Democratic strategist Dale Emmons. "To do that, a person has to give up a lot of personal time and time away from their vocation just to make the race. And once you're elected, you continue to have to do that. Seldom does that legislative pay of $30,000 or so make up for that."

"Thayer, 44, responds by calling Hostetler "a little desperate." Thayer touts his conservative support from U.S. Sen. Rand Paul, R-Ky., the National Rifle Association, the pro-business Kentucky Club for Growth (which ranks him best among 38 state senators) and the anti-abortion Kentucky Right to Life."

We will hold endorsed candidates accountable for these principles by monitoring each candidate on a vote-by-vote basis. As a Club member, you will receive candidate monitoring updates and scorecards on a regular basis. Join us today.